World Bank: Indonesia Saved by Subsidy Policy
14 April 2015 14:16 WIB
TEMPO.CO, Jakarta – The World Bank applauds Indonesia's economic policy, complimenting the government's subsidy policy. The World Bank says the policy has saved the country from the commodity price declines as well as external risks stemming from The Fed's plan to lower interest rates.
When launching The East Asia and Pacific Economic Update yesterday, World Bank chief economist for Indonesia Ndiame Diop said that Indonesia has been dealing with commodity prices decline since 2012.
"In the past, Indonesia could earn plenty from commodity exports, but lately corporate income is declining and companies are losing their investment capability is dropping," he said.
In the 2015 Amended State Budget and Expenditure, the government's subsidy budget was reduced to Rp211.3 trillion following the subsidy cut for Premium gasoline.
Diop hopes the subsidy fuel reduction could add to the state's infrastructure development budget by Rp100 trillion.
Echoing a similar sentiment, World Bank's chief economist for East Asia and Pacific Sudir Shetty said he is confident that Indonesia's decision to maintain interest rates will lower the number of non-performing loans.
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